POWER PLANT INPUT/INPUT CREDIT ADMISSIBILITY

[SURYA KANT GUPTA]

Is there any judgement with regard to availment of CENVAT credit on input/input services used in CAPTIVE POWER PLAN particularly given by HON'BLE SUPRREME COURT

[Snehal Kulkarni]

May we request you to elaborate the query in details ?

If the CPP is within the Manufacturing Area's Premises and the Power produced is fully consumed within the Manufacturing Process only, then the Cenvat Credit on the Input like FO and the Input Services like AMC is eligible.

 

[CA Rachit Agarwal]

Refere the case of Supreme Court in Maruti Suzuki Ltd, where in the proportionate amount of electricity sold was reversed.

If in case of captive power plant, if the electricity is sold to the grid/outside partly, proportionate cenvat credit on "inputs" to be reversed.

AI Summary

Cenvat credit admissibility: captive power used exclusively in manufacturing allows credit; proportionate reversal if power is supplied externally.
Availability of Cenvat credit for inputs and input services used in a captive power plant turns on use: if power is fully and exclusively consumed in manufacturing, credit on inputs and input services is admissible; if some electricity is supplied outside the manufacturing process, the portion of credit attributable to that supplied power must be proportionately reversed.